London's commercial property sector anticipates record demand for data centres in 2025, driven by hyperscalers and AI providers, signifying a robust investment opportunity.

Target Information

The focal point of this article is the commercial property market in the UK, particularly emphasizing London’s data centre sector. In 2025, London is anticipated to experience unprecedented demand for data centres, with a projected take-up of 183 megawatts (MW), representing a 58% increase from 2024 and doubling the figures from 2021. This surge is predominantly fueled by hyperscalers and an increasing requirement for capacity from artificial intelligence (AI) providers. With approximately 80% of the UK’s data centre facilities located in and around London, the city’s established infrastructure continues to attract significant investor interest despite higher electricity costs compared to other European nations.

Currently, service providers in London face challenges in meeting this soaring demand. It is expected that nearly all new data centre spaces slated for completion in 2025 will be occupied before their actual operational date, contributing to a forecasted decrease in the capital’s vacancy rate to 8% by year-end.

Industry Overview in the UK

The overall landscape of the UK commercial property market remains mixed, with regional variations evident across different sectors. Following a challenging period, retail property investment witnessed a substantial recovery in the second quarter of 2025. Accordi